When filing for bankruptcy, you will want to be clear and direct about your assets and what kind of debts you have. While most people want to use bankruptcy appropriately to eliminate or control their debts, some individuals attempt to take advantage of the system and end up committing bankruptcy fraud.
But what is bankruptcy fraud and what can you do to avoid it?
What is Bankruptcy Fraud?
Bankruptcy fraud refers to the act of withholding information or purposefully providing wrong information with the intent to take advantage of the bankruptcy court. There are a few different ways that bankruptcy fraud can occur, potentially happening even before bankruptcy is filed.
The most popular kind of bankruptcy fraud is concealing assets. When you conceal an asset, you do not list it to the court. This will prohibit the asset from being liquidated and the money cannot be used to pay off creditors. Individuals or businesses may also attempt to transfer the asset to another friend or family member so that the asset cannot be located.
Bankruptcy fraud may also occur if the means of accumulating the debt was done so fraudulently. If the money owed was received under false pretenses or false representation, then you will not be able to discharge your debt through bankruptcy.
Other types of bankruptcy fraud may include filing for bankruptcy multiple times by filing in multiple states or using aliases or false names. Many individuals who are attempting to conceal assets will try this strategy because it can slow the court process and give them more time to transfer assets they do not want to be liquidated.
Finally, bankruptcy fraud may also occur when the individual attempts to make bribes with the court.
Avoiding Bankruptcy Fraud When Filing for Bankruptcy in Brooklyn
Bankruptcy fraud is actually considered a criminal offense, so if you are found of committing bankruptcy fraud you may face imprisonment and steep fines. To ensure that your bankruptcy paperwork is filed appropriately and completely, a bankruptcy attorney can help you through the process.
The experienced bankruptcy attorneys at Michael F. Kanzer & Associates, P.C. can help you through your bankruptcy filing. We have vast experience helping Brooklyn residents through Chapter 7 and Chapter 13 bankruptcy.